Requirement 14.008 – Net royalty Acre Conflict

Top  Previous  Next

Requirement 14.008 – Net royalty Acre Conflict

 

 Crockett Royalty Deeds:  By statutory warranty deed dated March 6, 2006, and recorded in Deed Book 401, page 383, David Crockett acquired an undivided one-thirty-second royalty interest in Tract 1 from James Bowie.  The interest was for a primary term of five years and as long thereafter as oil and gas were produced from Tract 1.  By virtue of the following described deeds, Crockett ostensibly conveyed away his entire royalty interest in Tract 1:

 

(1)Statutory warranty deed dated March 18, 2006, and recorded in Deed Book 401, page 405 by which Crockett conveyed an undivided one-sixty-fourth royalty interest in Tract 1 to Jerry C. Day; and

 

(2)Statutory warranty deed dated March 18, 2006, and recorded in Deed Book 401, page 408 by which Crockett conveyed an undivided one-sixty-fourth royalty interest in Tract 1 to Squire Daymon.

 

 Each of the deeds from Crockett granted an undivided “1/2 of 1/2 of 1/16th of 8/8ths” of all oil and gas produced from Tract 1.  At the same time, each of the deeds from Crockett contained the following intention clause:

 

Notwithstanding anything to the contrary contained herein, it is the intention of the grantor herein to convey to the grantee here­in, and grantor does hereby grant, sell, bargain, convey and warrant unto grantee an undivided 2.5 net royalty acres in, on or under the above described lands.  The convey­ance is warranted as to the return of purchase price on a per acre, pro-rata basis only.

 

 The grant of a fractional, one-sixty-fourth royalty interest would be equivalent to 2.5 net royalty acres only if Tract 1 comprised exactly twenty surface acres.  If Tract 1 comprised more than twenty surface acres and if Crockett conveyed only 2.5 royalty acres each to Day and to Daymon, Crockett would still own a royalty interest in Tract 1.  If, on the other hand, Tract 1 comprised less than twenty surface acres and if Crockett conveyed only 2.5 royalty acres each to Day and to Daymon, then Crockett would not have had sufficient title to make those conveyances to Day and to Daymon.

 

 In our table showing the participation in revenue from the proceeds of the sale of oil and gas production from Tract 1, we have assumed that Tract 1 contains exactly twenty acres.  Consequently, we have shown that David Crockett has no royalty interest in production from Tract 1 and that Jerry C. Day and Squire Damon each have an undivided one-sixty-fourth royalty interest in production from Trat 1.

 

 Requirement:  If you obtain production from Tract 1 or lands pooled with Tract 1:

 

(1)Obtain a survey of Tract 1.

 

(2)If Tract 1 contains more than twenty acres, you should obtain from David Crockett, Jerry C. Day and Squire Damon a recordable deed with cross grants establishing their mineral ownership interests in Tract 1 based upon your survey.  If Crockett, Day, and Damon will not join in such a deed, you should deposit into the registry of a court of competent jurisdiction any royalty proceeds attributable the disputed interests and interplead the potential claims of Crockett, Day, and Damon.

 

(3)If Tract 1 contains less than twenty acres, you should obtain from Jerry C. Day and Squire Damon a recordable deed with cross grants establishing their mineral ownership interests in Tract 1 based upon your survey.  If Day and Damon will not join in such a deed, you should deposit into the registry of a court of competent jurisdiction any royalty proceeds attributable the disputed interests and interplead the potential claims of Day and Damon.

Copyright 2011 by Edward G, Hawkins. All rights reserved.